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CIPS L4M6 certification exam is globally recognized and highly respected among procurement professionals. It is an essential certification for individuals who want to advance their career in procurement and supply chain management. L4M6 exam is designed to test the candidate's knowledge and understanding of the different elements of supplier relationships, including the ability to build strong supplier relationships, manage supplier performance, and mitigate supplier risks.
NEW QUESTION # 58
Mendelow's Stakeholder Matrix categorises stakeholders into four groups and provides insight into how these stakeholders should be managed. What is a limitation to using this Matrix to categorise stakeholders?
- A. Nowadays, Stakeholders fall into more than four categories
- B. The categories are hard to remember
- C. The Matrix doesn't consider whether the stakeholder is for or against the activity
- D. The Matrix doesn't consider the power these stakeholders have
Answer: C
Explanation:
The correct answer is 'The Matrix doesn't consider whether the stakeholder is for or against the activity'. For a list of other limitations of using Mendelow's Stakeholder Matrix see p.82
NEW QUESTION # 59
Victoria runs a hotel and has recently had several security issues such as attempted robberies. She has decided that she needs to hire a security firm to ensure these issues don't continue. She has done some research and has found there are several local security firms who may be able to provide services to her hotel. However, she hasn't decided exactly what she would require the security firm to do. What should be Victoria's next steps?
- A. Issue a Request for Quotation
- B. Issue a Request for Proposal
- C. Issue an Invitation to Tender
- D. Issue a Prior Information Notice
Answer: B
Explanation:
Victoria should use a 'request for proposal' - this allows the security firms to submit ideas on how best to serve the hotel. They might come up with some ideas that Victoria hasn't thought about and can price against their own ideas. As Victoria doesn't have a concrete specification, an ITT or RFQ are not appropriate. A PIN tells suppliers that a tender opportunity is coming up and is used in the Public Sector. A hotel is not a Public Sector organisation. See p.76 for more information on when to issue a Request for Proposal
NEW QUESTION # 60
Partnership relationships are long-term relationships without a defined end period. Is this statement TRUE?
- A. Yes-partnerships do not have end dates because they involve significant investment
- B. No- partnerships should have end dates so both parties have a way out if things don't work out
- C. Yes- partnerships do not have end dates because there is never a contract involved
- D. No- partnerships have end dates as they are contractual relationships
Answer: A
Explanation:
The correct answer is 'Yes-partnerships do not have end dates because they involve significant investment'. This is explained on p.126. Partnerships can involve contracts - so the other 'yes' answer is incorrect.
NEW QUESTION # 61
When using portfolio analysis, in which segment would you place a product with high expenditure, potentially provided by a large number of suppliers?
- A. Acquisitive
- B. Leverage
- C. Strategic
- D. Critical
Answer: B
Explanation:
Comprehensive and Detailed Explanation:
In the Kraljic Matrix, products are categorized based on supply risk and profit impact:
* Leverage items:These have a high profit impact but low supply risk. They are often high-expenditure items available from multiple suppliers, allowing the buyer to leverage purchasing power to negotiate better terms.
Given the product has high expenditure and is available from many suppliers, it fits into the 'Leverage' category.
Reference:
CIPS L4M6 Study Guide
NEW QUESTION # 62
A textile company is purchasing a new item which is low value. This item is likely never to be required again by the company and is widely available from many different suppliers. Which commercial relationship type would be most effective for the buyer to choose?
- A. Partnership
- B. Closer tactical
- C. Outsourcing
- D. Adversarial
Answer: D
Explanation:
For low-value, non-recurring items with many suppliers, an adversarial relationship focusing on competitive pricing and minimal engagement is most appropriate. Partnerships are unnecessary for such transactions.
NEW QUESTION # 63
One of the fist stages of designing a Partnership is to come up with joint KPIs. These should be:
- A. Time bound, difficult and relevant
- B. Relatable, specific and measurable
- C. Measurable, achievable and time-bound
- D. Significant, measurable and achievable
Answer: C
Explanation:
The correct answer is Measurable, achievable and time-bound. This is from SMART KPIs on p. 151. Smart stands for specific, measurable, achievable, relevant, time-bound. In the exam they come up in different orders so be careful.
NEW QUESTION # 64
A medical consumables buyer has adopted a close relationship approach with their suppliers that are considered to be complicated, technical suppliers. Is this the right approach?
- A. Yes, as all the items supplied are off the shelf
- B. Yes, as the items are of high financial risk
- C. No, as there is often a supply risk with items offered
- D. No, as there are only a small number of suppliers in the marketplace
Answer: B
Explanation:
Complex and technical suppliers often involve high financial risks due to the critical nature of their products.
A close relationship ensures better collaboration, risk management, and value generation.
NEW QUESTION # 65
A vehicle company has a partnering relationship with the manufacturer of its engines. The manufacturer is considered a key partner and is already involved in product development at the vehicle company in several strategic projects. The car company and engine manufacturer have integrated systems for a just-in-time (JIT) delivery. Is this an example of a significant integration partnership?
- A. Yes, because it includes elements of joint product development
- B. No, as there is a short-term focus on the relationship
- C. Yes, as this is an example of a target costing approach
- D. No, it is an example of a less time-intensive partnership
Answer: A
Explanation:
Comprehensive and Detailed Explanation:
The described relationship includes:
* Joint Product Development:Collaborative involvement in strategic projects indicates a deep partnership.
* Integrated Systems:JIT delivery systems require synchronized operations, reflecting significant integration.
These elements are hallmarks of a significant integration partnership.
Reference:
"Strategic Supply Chain Partnership"-ResearchGate: Strategic Supply Chain Partnership
NEW QUESTION # 66
Canadian Office Furniture Manufacturing Ltd (COFM) was trying to enter the Australian market, but without any success. The main issue is that the Australian government supports local manufacturers. COFM has successfully bid to acquire an Australian office furniture manufacturer. Which of the following benefits will COFM achieve by the acquisition?
* Accessing the restricted local market
* Removing the government support for local manufacturers
* Decreasing the competition between local manufacturers
* Improving its knowledge of the local market
- A. 1 and 4 only
- B. 2 and 3 only
- C. 1 and 2 only
- D. 3 and 4 only
Answer: A
Explanation:
Comprehensive and Detailed Explanation:
By acquiring an Australian office furniture manufacturer, COFM can:
* Access the Restricted Local Market:Acquisition allows COFM to operate as a local entity, thereby overcoming barriers to entry and benefiting from any local government support available to domestic manufacturers.
* Improve Knowledge of the Local Market:The acquired company brings with it an understanding of local customer preferences, regulatory requirements, and market dynamics, which is invaluable for successful operations.
However, the acquisition does not remove government support for other local manufacturers, nor does it necessarily decrease competition.
Reference:
CIPS L4M6 Study Guide
NEW QUESTION # 67
Which of the following relationship types are characterised by low levels of trust? Select TWO options
- A. Outsourced
- B. Partnership
- C. Arm's Length
- D. Adversarial(Correct)
- E. Single- Sourced
Answer: C,D
Explanation:
Adversarial and Arm's Length relationships have low levels of trust. Single Source, Partnership and Outsourcing require high level of trust. See p.5 for the Supplier Relationship Spectrum
NEW QUESTION # 68
Polly Manufacturing is a company which manufactures bicycle parts. It has several factories around the country and is one of the leading suppliers of wheels, bells and pedals. Which of the following is Polly Manufacturing likely to outsource? Select TWO options.
- A. Manufacturing of bells only
- B. Facilities Management
- C. Manufacturing of all bicycle parts
- D. Cleaning
Answer: B,D
Explanation:
They could outsource cleaning and facilities management. These are auxiliary services. The manufacturing of bike parts is their 'core' business so they should retain this in-house
NEW QUESTION # 69
Which of the following would not affect rivalry in a marketplace? Select TWO.
- A. switching costs
- B. legislative changes
- C. industry growth or decline
- D. exit barriers
- E. supply chain disruption
Answer: B,E
Explanation:
Legislative changes wouldn't affect rivalry in a market as all suppliers would be equally as affected, the same with supply chain disruptions. Factors which do affect rivalry include; industry growth and decline, product differences, brand identity, switching costs, diversity of competitors and exit barriers. These are listed on p.41
NEW QUESTION # 70
A software developer is seeking to develop a new fitness trends app. They are looking to create a contract with a fitness expert to give advice on the type of changing fitness trends. What agreement should the app developer aim to achieve?
- A. Quality-based relationship
- B. Traditional contracting relationship
- C. Partnering relationship
- D. Cost-based relationship
Answer: C
Explanation:
Comprehensive and Detailed Explanation:
In scenarios requiring specialized expertise and collaborative input, apartnering relationshipis most appropriate. This type of relationship fosters close cooperation, shared goals, and mutual trust, enabling both parties to contribute effectively to the project's success.
Reference:
CIPS L4M6 Study Guide
NEW QUESTION # 71
Lion Manufacturing is about to enter into a partnership with Penguin Logistics, who will provide delivery to and from Lion Manufacturing's factories and warehouses. In this relationship, what type of negotiation strategy should Lion manufacturing use?
- A. win: lose with the supplier winning
- B. lose: lose
- C. win: win
- D. win: lose with the buyer winning
Answer: C
Explanation:
partnerships are always win: win p.7
NEW QUESTION # 72
Stephen Jones is assessing the relationships he has with his supplier base. Which of the following would be drivers for Stephen to adopt a partnership relationship with a supplier?
- A. 2 and 3 only
- B. 2 and 4 only
- C. 1 and 2 only
- D. 1 and 4 only
Answer: B
Explanation:
High expenditure levels and the complexity of requirements justify partnership sourcing, as it allows for collaborative problem-solving, innovation, and cost-efficiency. CIPS emphasizes that partnerships are ideal when requirements are complex and require expertise from the supplier.
NEW QUESTION # 73
Sandra is a buyer for a large supermarket and has been increasing unhappy with the performance of a long-term supplier of bananas. Over time the deliveries have become unreliable and this has had impacts on the supermarket's profitability. What should Sandra do first?
- A. Obtain business approval to terminate the contract
- B. Give written notice to the supplier of plans to terminate
- C. Develop an exit strategy
- D. Review the market and look for an alternative supplier
Answer: A
Explanation:
The first step is to obtain business approval to terminate. If Senior Management don't give approval, then the rest of the stages can't happen and Sandra will be stuck with her current banana supplier. There's a good diagram on p.109 detailing the steps to supplier termination.
NEW QUESTION # 74
A university based in Europe has an objective to increase the number of students coming from the United States of America (USA). The university appoints a consultant with specialist knowledge of the USA market and has issued them with a performance-based specification. Which of the following is a characteristic of a performance specification?
- A. It provides details of how the services must be carried out
- B. It encourages innovation from the supplier
- C. It enables the buyer to detail technical information
- D. It ensures the supplier must conform with the specification
Answer: B
Explanation:
Comprehensive and Detailed Explanation:
A performance specification outlines the desired outcomes or results without prescribing the exact methods to achieve them. This approach allows suppliers the flexibility to use their expertise and creativity to meet the buyer's requirements, thereby encouraging innovation.
Reference:
CIPS Procurement Specifications Guide
NEW QUESTION # 75
Which of the following would you use to qualify new suppliers? Select THREE.
- A. cost
- B. clean
- C. commitment
- D. call
- E. collection
Answer: A,B,C
Explanation:
This is based on a real exam question- it's looking to see if you can remember Carter's 10 Cs. These are; cash, cost, consistency, culture, clean, communication, competency, capacity, commitment and control. (p.12 in the text book)
NEW QUESTION # 76
Which of the following describes differentiation as a method of competitive advantage?
* A company that sets out to be the lowest-cost producer in the market
* A company that will seek to be unique in a way that is valued by buyers
* A company producing a standard or budget cost product
* A company producing a product that attracts a premium price charge
- A. 2 and 3 only
- B. 1 and 3 only
- C. 2 and 4 only
- D. 1 and 2 only
Answer: C
Explanation:
Comprehensive and Detailed Explanation:
Differentiation involves offering unique products or services that are valued by customers, allowing the company to charge premium prices. This strategy focuses on uniqueness and added value rather than competing solely on cost.
Reference:
CIPS L4M6 Study Guide
NEW QUESTION # 77
In public sector procurement, tenders are advertised with CPV codes, which provide a reference to describe the product or service being tendered. What does CPV stand for?
- A. Complete Procurement Vocabulary
- B. Condensed Procurement Vocabulary
- C. Common Procurement Vocabulary
- D. Clear Procurement Vocabulary
Answer: C
Explanation:
CPV stands for Common Procurement Vocabulary. This is explained briefly on p.72 but it doesn't really go into much detail as to what CPVs are or how they work. CPVs are a string of numbers which refer to an object that is being procured. For example the CPV for Fire Doors is 44221220. When a Tender gets advertised for Fire Doors, it will have this CPV code on, and any suppliers who provide fire doors will get a notification if they have this CPV code on their profile. It's basically a code that links suppliers with tender opportunities.
NEW QUESTION # 78
Which of the following are characteristics that differentiate between a partnership relationship and traditional contracting relationships? Select THREE.
- A. Lower costs
- B. Supplier KPIs
- C. No tender process
- D. Early supplier involvement
- E. No defined end period
Answer: C,D,E
Explanation:
The correct answers are; no tender process, early supplier involvement and no defined end-period. A partnership wouldn't automatically mean lower costs, and in a partnership the KPIs are usually a joint performance measurement rather than set to the supplier. For more information on the difference between partnerships and contractual relationships see p.124-5
NEW QUESTION # 79
Which of the following are typical drivers for a partnership between the buyer and the supplier? Select the THREE that apply.
- A. The product is critical for the buyer
- B. The product is technically complex
- C. The buyer has a high spend with the supplier
- D. The supplier provides the product to a buyer's competitor
- E. There are many suppliers in the market
- F. The product is a commodity
Answer: A,B,C
Explanation:
Comprehensive and Detailed Explanation:
Partnerships between buyers and suppliers are often driven by:
* High Spend:Significant expenditure justifies the investment in developing a closer relationship to achieve cost savings and efficiencies.
* Critical Products:Items that are essential to the buyer's operations necessitate a reliable and collaborative supplier relationship.
* Technical Complexity:Complex products benefit from joint development efforts, shared expertise, and coordinated problem-solving.
Conversely, commodities and markets with many suppliers typically lend themselves to transactional relationships rather than partnerships.
Reference:
CIPS L4M6 Study Guide
NEW QUESTION # 80
Innovation is a key consideration when entering into a partnership. Is this statement true?
- A. Yes- innovation is the only reason to enter into a partnership
- B. No- the key consideration when entering a partnership is cost reduction
- C. Yes- joint innovation projects are often a strong motivation for entering into a partnership
- D. No- innovation is best achieved in a contractual relationship where KPIs can be monitored closely.
Answer: C
Explanation:
The correct answer is 'Yes- joint innovation projects are often a strong motivation for entering into a partnership'. The other options are simply not true statements. A lot of the questions on the 'Partnerships' chapters of the book are common-sense questions like this. It involves reading the Question: and using logic, rather that relying on your knowledge of procurement. If you found this Question: easy - that's a good sign for the exam.
NEW QUESTION # 81
......
The CIPS L4M6 exam is structured in a way that enables candidates to demonstrate their understanding of the concepts and principles of supplier relationship management. L4M6 exam format includes multiple-choice questions, scenario-based questions, and short-answer questions. It is important that candidates have a good understanding of all the concepts covered in the exam, and are able to communicate their ideas effectively.
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